Production Obstruction

Critics cite mounting evidence that Obama administration is blocking oil and gas production

March 25, 2013

Delays in federal permitting for oil and gas exploration on public land is likely reducing national energy production and depriving the federal government of revenue, according to a federal report released Friday.

The report is the latest addition to a mounting body of evidence undercutting the administration’s claims that it has fostered increased oil and gas production, critics say. Production on lands the federal government controls has plummeted during Barack Obama’s presidency.

The United States Department of Agriculture’s (USDA) inspector general examined 1,881 applications for drilling permits on public land. Fewer than 4 percent of those applications were "recent," or filed in the last 180 days. The rest had experienced prolonged delays.

"By not processing these nominations as expeditiously as possible," the Forest Service, a division of the USDA, "may be causing the federal government to forego revenue or prevent or delay the efforts of the private sector to provide energy to the public."

The report is the second analysis by a federal body this month to support claims by administration critics that its energy policies have restricted domestic oil and gas production.

"On every front, when it comes to oil and gas production, [Obama’s] agencies have been doing less and less and making it harder and harder" to extract fossil fuels from federal land, said Dan Kish, senior vice president for policy at the Institute for Energy Research.

The administration continues to tout increases in total U.S. oil and gas production as evidence that its energy policies are furnishing increased domestic energy resources.

But production decreases on federal land have some members of Congress crying foul.

Obama is "trying to use some kind of Jedi mind trick to say, ‘there is no problem here, move along,’" said Rep. Cory Gardner (R., Colo.).

Would-be oil and gas producers "run into nothing but roadblocks and delays" in the federal permit application process, Gardner said.

Gardner is a member of the House Energy and Commerce Committee, which held a hearing last year on those delays.

Chairman Fred Upton (R., Mich.) said at the hearing that the administration had offered "one excuse after another for preventing energy production entirely or subjecting it to years of unnecessary delays."

The president continues to tout total production numbers while avoiding any mention of the decline in production on federal land.

"We produce more oil than we have in 15 years. We import less oil than we have in 20 years," Obama said at a March 15 speech on energy policy. The White House website cites similar statistics.

Obama used his speech this month to push for a plan to use federal oil and gas revenues to pay for renewable energy projects. However, the report made available Friday suggests that his policies are restricting those revenues by delaying approval of oil and gas projects on federal land.

The report came on the heels of a Congressional Research Service report showing that oil and gas production on federal land is currently below fiscal year 2007 levels.

"All of the increase [in crude oil production] from FY2007 to FY2012 took place on non-federal land," the report stated. Natural gas production on federal land fell by about 23 percent during the same time.

CRS found that from 2006 to 2011 the average processing time for an oil or gas drilling permit application on federal land increased from 218 days to 307 days.

As USDA’s IG noted, those delays can reduce energy production and federal lease revenue.

They can also damage communities that depend on small oil and gas producers to power their local economies, according to Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America.

Delays in federal permit applications can have "a devastating impact on communities" in western states such as Nevada where 83 percent of the land is federally owned, Naatz said.

Gardner said his constituents have complained about their inability to secure oil and gas leases on federal land in Colorado. More than a third of the state’s land is federally owned.

One Colorado oil and gas producer recently told the Energy and Commerce Committee that delays in federal permitting for oil and gas production were forcing the company to reconsider activities on federal land.

"While public lands projects almost always take longer than comparable private and state projects, the delays I’ve seen in the last few years make me question for the first time whether I want to undertake new oil and gas business with the federal government," Reed Williams, president of WillSource Enterprise, a small oil and gas drilling company, told the committee last year.

"That’s a strange thing to say since WillSource now believes the project could produce $3 billion worth of natural gas; generating significant job and economic growth," Williams added.

"The bottom line is: If we could access more of our public and private lands, we would be creating more jobs," Gardner said.